new and improved? the pharmaceutical industry in america is constantly researching and innovating. this makes it possible for the industry to market new medicine, all the time. but new is not necessarily improved. so says a brand new study funded by the british government. the study found that older, cheaper, generic drugs were treating mental illness were better across-the-board than newly marketed medications.

when it comes to prescription drugs, how can you tell when new really means improved? we'll ask dr. sharon levine. new study i referred doctor sharon levine, from san francisco, associated executive director of kaiser permanenty. that new study refers to schizophrenia and the new

drug it was found is better than the existing drug, right? >> yes, that's right this. is a very important studdy and it demonstrated in a larg population that the older antipsychotic drug, heldol, was more affective than the newer category called a typical antipsychotics. and it really speaks to the fact that we have a buys, all of us, consumers, physicians, we assume that new means improved. and in fact, what is really true is that needs to be established by solid evidence and not just asmption. this is a very important study for the federal government. very important study for state government. because this category of drugs is a substantial expense for the medicaid program. >> what's the cost between haldol and the new drug that

came out? >> it's a difference between haldol and a entire category, the a typical antisigh cotics. it's a many expense. that doesn't mean haldol is e right drug for every patit but what this study demonstrate said when you look at a large population, for a substantial number of patients, the older now available as a generic drug, is in fact more effective at controlling symptoms than the newer category of drugs. so it just speaks to the issue of first of all, the treatment needs to be at a lord to the individual and that if -- tailored -- we need to enter into the prescribing process with an open mind whether in fact this new dru offer any advantage whatsoever to our patients. >> the cost of the treatment will drop by as much as 80%. >> correct. >> and you get the same

effect right? >> correct. >> that's really quite dramatic. in fact, it led an editorial writer for the british study, his name is jeffrey lieberman, a researcher in the trial, and he said the claims of superiority were greatly exaggerated, of the new drug. the aggressive marketing of theserugs may have contributed to this enhance perception of effectiveness in the absence of information. so apparently they haven't done their test to show this new drug was an improvement over what existed. there is very little research in this country of com parityive effectiveness. and that is looking at a new drug, comparing it in what we call a head-to-head trial to see whether the drug offers an improvement. when the fda aproves a drug fo marketing, a new drug, what the manufacturer has to

establish is that the new drug is better than nothing. >> are we talking about wikperdol? >> that's one of the drugs. this is a whole category but that's the one in the study. if you found this is true, the newer drug will claim it's an improvement or suggested an improvement, plus the impact of the advertising programs and the solicitation of doctors from brands? i don't want to -- we're not here to fault brand drugs and we'll explain that in a minute. but, there is no advertising for the drugs that we're talking about here. the generic drugs. >> very little promotion of generic drugs to consumers or doctors. >> because when the brand drugs goes off patent, you get a variety of generic

companies. it's per missibility and for all genarks to eer the competition, correct? >> for the first 6 months, the first generic manufacturer to challenge the patent has exclusivity for 6 months. this is very important because this was created by the hatch wax man act in 1984. and it creates a 6 month exexclusivity for the first generic company because we want judge nark companies to come into the market. after 6 months, the generic drug goes from being a monopoly product to a commodity. get lots of hopefully lots of manufacturers coming in producing quality generics. that works in consumers benefit because it's competition and the ability to say no to one manufacturer in favor of another for price concessions&that's how consumers interests are served. congress established an effective patent life for a

drug. when that expires, there is a real value opportunity through generics, through the availability of quality generics for consumerso take advantage for their own economic and health purposes of a generic availability in the market. >> are generics controlled or examined or reviewed for their quality in comparison to the brand drug? >> absolutely. >> who does that? >> the fda does that and they have been very rigorous for the last 20 years of ensuring that the manufacturering process, the cleanliness where the drugs manufacture these are generic manufacturers. they have to establish that the drug is the same. the chemical is the same and that it is bioequivalent. it does the same thing in the body. and the fda is rigorous about examining these manufacturering plants, the

manufacturering processing. when the fda certified the quality generic, consumers and patients can be >> identical in administration, strength, doseage and qualitiy? >> that's correct. >> you found that to be true in your own medical practice? >> absolutely. and kaiser goes a step further. we -- our pharmacy organization does its own investigations of manufacturing plants that manufacture generics and we ascertain for ourselves on behalf of our 8 1/2 million members that the generic manufacturer is a good manufacturing process but as is going t consientl that mean? >> it means the

effect -- effect in the body of the drug will produce the same effect in the body as the brand drug. and those are the two things the fda requires. >> now, does a biopharmaceutical main generate friday so many form of life as opposed to chemicals -- >> that's correct. biopharmaceutical or biotech drugs comes from living materials. cell is generally a protein. and it's a much more complex molecule than a simple small molecule traditional pharmaceutical. >> but there are these biodrugs are also in the generic sphere? >> no, they are not. >> they are not? >> no. and the reason we don't have generic by lodgics is that there is no framework for bringing a generic by logic to market. this is something that congress is looking at. this is something that i think everyone agrees needs

to happen. >> what do you mean there is no framework? examination procedure? >> no regulatory framework for a generic manufacturer of a biopharmaceutical to say to the fda, we have a drug that is equal in affectiveness and is going to produce the same effect. in 1984 what the hatch-waxman act did was it said, the manufactur of the generic can now use the research that the brand manufacturer did. they don't have to start from ground-zero. and if one is a drug is the same and they can prove it's bioequivalent, they can base their effectiveness argument on the research done by the grand wump. >> i don't get it. i don't get it. if you can take the research of a nonbiological biogenic

you're calling them. a biopharmaceutical, and -- you can not take -- you can take the research or can you - ue can take the research? you can. >> you can? >> for a traditional pharmaceutical. a generic merfer can say -- >> if it's only chemistry? >> yes. >> was that distinction made by hatch and wax man in 84? >> in 84 i don't think anyone envisioned what was coming in terms of biopharmaceuticals and so the hatch-waxman act in 84 addressed traditional pharmaceuticals and what we need is a comparable regulatory process in legislation to do the same thing. >> is it that much of a distinction between a biopharmaceutical and a nonbiopharmaceutical? >> there really is. >> so you could exact that kind of reaction to it o

or -- it's a regulation? you can only deal with tra dition additional drugs? and these are new drugs. they are also very expensive drugs. and you nd support for $5,000 a month to treat colon cancer with the drug used to treat a judge nark condition that costs you a lot annually. >> rem cade -- >> rem cade used for severe rheumatoid arthritis. $5,000 monthly. >> 3,500 a year. still a lot of money. >> this is astronomical. >> yes, i>> and no relief for t? is there an insurance policy for that? >> most insurers cover biopharmaceuticals as part of the drug benefit. it's the fastest growing component of drug costs. >> suppose there is for these -- for these biopharmaceuticals you just said there is no -- >> no generic.

>> no equivalent. >> right. >> so you mean you're going to pay an extra premium and an extra copay? >> yes. >> to get this drug at these rates? to save your life? >> another way of looking at it is the patent's life on these drugs is essentially infinite until we have regulation that allows what are biogenerics or biosimilars is another name for them, to come to market. >> i show 150 of these biotech drugs. >> i suspect there are actually more and there are another 500 in the pipeline. >> are they over priced? >> that's a good question. they are very, very expensive and if you ask the manufacturers they will say, and very legitimately, thee are complex protein molecules. the manufacturing process is very complex. but as a consumer, as a

physician, one of the questions i ask is, how do you defend the pricing on these drugs given that the price has a lot to do with whether consumers can actually take advantage and have access to these modern miracles? >> it started a decade ago and it was 8 billion dollars a year industry. it's gone to a 40 billion dollar a year after 10 years. it's going to be 90 billion dollars in 3 more years. does tv advertising for new drugs distort their effectiveness? leading people to think that new means improved? we'll put that question to our guest. first here is her distinguished profile. >> born boston. 60 years of age. husband, francis j cross um. one child. harvard university ratcliffe college. bampt a. toughniveity md.

couple laddy. georgetown and tust universities school of medicine instructor in pediatrics, 3 years. the permanent medical group. multiple leadership roles including chief of pediatrics and associate executive director. 29 years all together and currently. hobbies, hiking. sharon levine. >> sharon levine, we are joined by vicki got lick, senior policy attorney for the center of medicare advocacy. are thru? >> i am. good morning. >> vicki, do you have thoughts on what we've been saying so far about the cost implications of by lodgics versus traditional drugs or any aspects of the conversation thus far? >> i have a lot of conthoughts about your conversation. cost is a very important factor and cost very often will cause the population

not to be able to afford the drugs. even if they have drug coverage for a biopharmaceutical, very often the copayments are so high that people can't afford the copayments. people are bankrupting themselves in order to get these needed medications and it would be very useful if they could in fact have a generic version if a generic version were available. and in some instances where there are generics available, but people cannot tolerate the generic we have the opposite problem. have you somebody who needs a brand name drug but the person is on a health plan that only covers a generic drug. again they have no insurance for the brand name drug. we have encountered many people in the work that the center does who tried the generic drugs. they for some reason don't work for them and they need to go back to the brand name. but they need to go through a lot of hoops through their insurance company to get the

brand name drugs covered. >> is the inability tow take a generic -- i think you're talking biojenics? no, you're not. a generic drug. a traditional generic drug. is that owing to any deficiency in the product or is that because of a special characteristic in the patient? >> i think very often it's going to depend on the patient. there was some litigation about the medicaid program on its failure to cover brand name drugs in florida. and there was some affidavit testimony from a neurologist who said that he had a lot of patients with epilepsy who were on brand named drugs forced to switch to generics and had seizures when they had been seizure free for years t may be the individual patient who can't tolerate perhaps the finding agent in the generics or something in the generics.

and for these folks, when they can't get active to the brand name drug, they have a hard time. >> have you heard of a doctor who took a brand name drug when off pattent and he tweak today i believe the drug was called, i show here abrexaine. and he tweak today so taxol was the generic, its active ingredient was coated and easier to take and avoid an allergic andraection potential side affects from taxol. he then took that tweaked drug and instead of making it a generic which was his rbleginal intention. this doctor patented it and he's made himself an enormous amount of money. >> i think that's not the only example. i think that there are several examples where there

have been tweaking of drugs so that they become a new brand name drug and inessinence a way defeat the hatch wax man act. and to make it more difficult to get cheaper generic drugs on to the market. >> the history o wave, are we n? >> absolutely. and one of the things that is produced this year is this is the first year of medicare part d. and one of the things that medicare part d has done is its raised consciousness and awareness among medicare members about the potential benefits of generic drugs and so youee, while 56%

over all of americans or prescriptions are now generics. if we look at the medicare population, it's more than 10% higher. >> if i use medicare to pay for my drugs, i'm going to get a generic drug? it depends. it costs less to get a generic drug. for some plans, if you really want the brand name drug you're going to to pay more. some of the problems we encountered with some of the medicare drug plans is that you have to give prior authorization in order to t the brand name drugs. so if you go to the drugstore, you're out of your prescription, you need the brand name drug for some reason because you can't tolerate the generic. you're going to have to wait several days to go through the process and you may be out of medication. >> but the ratio of nonacceptance to being able to accept is very small, is it not? most patients can take a generic drug without any

problems? i want to ask you this, dr. levine. would you regard yourself as pro generic without being antibrand? is that a fair description? >> i think that's a very fair description. i am pro consumer and pro patient and to me, the ability to access generics at a much lower cost is really important for my patients. >> vicki, do you have to be pro generic? >> i think that i like what dr. levine said initially. that you need to take the individual assessment of the patient. so over all, of course i'm pro generic because it's going to cost people less. but if a person can't take the generic drug i want them to be able to get their brand name drug. >> do you think that we run the risk today of making brand manufacturers look like groweddy mortals of who will do anything to -- greedy -- make a buck

and stretch out their patents whereas thaddle that's totally unjustified because they do such marvelous work in creating, finding, discovering, new drugs. and there is no system in the world that can match ours for the discovery of new pharmaceuticals. and then the generics come along and they take all of that research and use it. and it's legitimate. but they don't spend a billion dollars in bringing a drug to market. they don't go through the agony of protocols put out by the fda. so wei not really knocking brand drugs here, are we? >> not at all. what congress said is there is a period of time where the brand manufacturer has the right to monopoly price

the product and get return on that investment and there is a point at which though, consumers have the right to have access to those drugs when the patent expires. and i agree with you, this is not about knocking brand manufacturers. it's about a balance. it's finding a balance between ensuring. we have enough investment in brand pharmaceutical companies to insure a continuing stream of invasion but also that we have a point at which those patents expire and the price comes down and then consumers who by the way, through their taxes, are supporting a lot of the basic research that goes into this drug development, they have a right to get access to those drugs at a price they can afford. >> i know. but the brand -- if i were the ceo of a brand company i would think a lot of these generic companies are

paracytic. now that's a tough word to use in regards to generics but they poach on what we have produced. right? and we run the risk. we get the down on this before we let you go vicki? >> let's take a look at this in comparison to other markets. let's look at all technologies and how price comes down. think about the price of a personal computer compared with the price of a computer today or the price of a dvd player. or even mp-3 player. somebody develops the technology. other people come along, use it and it's time to buy, they can make the product cheaper and that's real what he we are doing here. in many ways the brand name drug manufacturers are luckier. because they have a legislatively protected lot of contho

isn't it correct and fair to say that we need both generics and we need brands? not necessarily in that order? no brands no generics but they are both needed and needed urgently? >> absolutely&they are both required for effective and efficient market for prescription drugs. >> is that really your opinion, vicky? >> yes it is. >> i got another question for you. the fda has been without a fullrs worely on the fda to permanent . >> i see i've >> absolutely.120,000 workers. it's it's an extremely important agency. do you think it's unconchenable our legislature has not solved that problem? >> we have to understand that there is some really good career civil servants who probably are making sure that agencyre are drug manufacturers raising the price in the

very clutch at the end? >> we do see some raising the price in the 6-9 months before the patent expires. >> does that defeat the alleged massive savings to the consumer from ger nark drugs? >> not at all. the opportunity is enormous. we know that if the country used anti-inflammatoriy drugs the way doctors and kaiser did rather than celebrex and vioxx, the country would have saved 5 billion dollars. >> i'm sorry we are out of time dr. sharon levine. dr. sharon levine.